Boy Scouts can't keep $667 million off the table, victims' group says
1/9/21 REUTERS LEGAL 00:24:39
Copyright (c) 2021 Thomson Reuters
Maria Chutchian
REUTERS LEGAL
January 9, 2021
Members of Boy Scouts of America wearing protective masks salute at a ceremony for Veterans who are unable to give military honors as the Pandemic during Memorial Day following the outbreak of the coronavirus disease (COVID-19) in the Staten Island borough of New York U.S., May 25, 2020. REUTERS/Jeenah Moon
(Reuters) - A committee representing Boy Scouts sex abuse victims on Friday argued that $667 million worth of the youth organization's assets must be made available to pay creditors, including the victims.
The victims' committee, represented by Pachulski Stang Ziehl & Jones, made its statements in court papers in the Boy Scouts' bankruptcy case, which is pending in the U.S. Bankruptcy Court for the District of Delaware. The organization, represented by White & Case, has said that it is working to develop a deal to compensate victims of sex abuse as part of the bankruptcy.
The Boy Scouts filed for Chapter 11 protection in an effort to resolve growing sex abuse litigation. Victims filed approximately 95,000 claims against the organization as part of the bankruptcy.
The committee's filing was made in response to the Boy Scouts' breakdown, submitted to the court at the outset of the bankruptcy, of $1 billion in assets that identified which are available as a source of payment to creditors and which are not. The committee contends that the Boy Scouts have failed to provide sufficient evidence showing that $667 million in assets are off-limits to creditors. Additionally, the group asserts that the organization has commingled assets that are available to creditors and those that are restricted for decades.
The Boy Scouts defended their classification of the restricted assets in a statement on Friday.
"We remain committed to the dual imperatives of our bankruptcy proceedings: to equitably compensate survivors of past abuse and continue the mission of Scouting," the organization said. "Our restricted assets are critical to delivering the mission of Scouting and make it possible for young people–including those from underserved communities–to benefit from the character-building lessons and opportunities found in Scouting."
The $667 million in dispute includes cash, general investment funds, donor pledges, and three camps called "high adventure facilities," among other assets and funds. The victims' committee is seeking a declaratory judgment from the bankruptcy court deeming those assets available to satisfy the victims' claims.
The Boy Scouts addressed the high adventure facilities in its statement as well, saying they "allow Scouts to experience the truest embodiment of the BSA's mission through outdoor activities, educational programs and leadership training."
A lawyer for the Boy Scouts said during a virtual court hearing in November that the organization is running low on cash due in part to the COVID-19 pandemic. The company is still in mediation with creditors and is aiming to emerge from bankruptcy by summer.
The case is In re Boy Scouts of America, U.S. Bankruptcy Court, District of Delaware, No. 20-10343.
For the Boy Scouts: Jessica Boelter, Michael Andolina and Matthew Linder of White & Case; and Derek Abbott, Andrew Remming, Eric Moats and Paige Topper of Morris, Nichols, Arsht & Tunnell
For the victims' committee: James Stang, Robert Orgel, James O'Neill, Ilan Scharf and John Lucas of Pachulski Stang Ziehl & Jones
End of Document© 2024 Thomson Reuters. No claim to original U.S. Government Works.